Statutory Audit — Companies Act, 2013

Q: What is CARO and does it apply to all companies?

CARO is an additional reporting requirement where auditors comment on fixed assets, loans, statutory dues, fraud, and controls. It exempts banking companies, insurance companies, Section 8 companies, OPCs, small companies, and certain small private limited companies.

Q: What is the difference between statutory audit and internal audit?

Statutory audit is a mandatory external opinion on financial statements. Internal audit is a management-driven review of controls and processes. Internal audit is also mandated under Section 138 for listed companies and certain large unlisted companies.

Q: Can a statutory auditor hold office for more than one term?

An individual CA can hold one 5-year term; an audit firm can hold two consecutive 5-year terms. Listed companies must rotate audit firms after two terms, with a 5-year cooling-off period before reappointment.

Q: What are the penalties for not getting a statutory audit done?

Penalties of ₹25,000 to ₹5,00,000 on the company and ₹10,000 to ₹1,00,000 on each defaulting officer. Unaudited statements cannot be filed with MCA, attracting late fees and potential prosecution.

Every company registered under the Companies Act, 2013 is mandatorily required to have its financial statements audited by an independent Chartered Accountant. We provide comprehensive statutory audit services ensuring your company meets all legal requirements and maintains the highest standards of financial transparency and corporate governance.

Statutory Audit

Complete statutory audit of financial statements as required under Section 143 of the Companies Act, 2013, covering the balance sheet, profit & loss account, and cash flow statement.

CARO Reporting

Preparation and verification of the Companies (Auditor's Report) Order (CARO) report covering all prescribed matters including internal controls, loans, and statutory dues.

Internal Financial Controls

Assessment and reporting on the adequacy and operating effectiveness of Internal Financial Controls (IFC) over financial reporting as mandated by the Companies Act.

Directors' Report Review

Review of the Directors' Report and all mandatory annexures — including Form AOC-2, MGT-9, and other disclosures — for completeness and accuracy before filing.

Related Party Transactions

Audit and verification of all related party transactions to ensure compliance with Section 188 of the Companies Act and applicable accounting standards.

Financial Statement Certification

Signing and certification of audited financial statements for AOC-4 filing with the MCA, enabling timely compliance with annual statutory obligations.

What is Statutory Audit Under the Companies Act?

A statutory audit under the Companies Act, 2013 is a legally mandated independent examination of a company's books of accounts, financial records, and financial statements. Conducted by a qualified Chartered Accountant, the statutory audit ensures that the financial statements present a true and fair view of the company's financial position and performance.

Beyond compliance, a statutory audit under the Audit & Assurance framework adds credibility to financial reporting, identifies errors and irregularities, and supports management in maintaining strong internal controls. It is closely linked with income tax audit requirements and is a prerequisite for MCA annual filings including the AOC-4 filing.

Which Companies Require Statutory Audit?

All companies incorporated under the Companies Act, 2013 — private limited, public limited, and one person companies
Companies with any level of paid-up share capital and turnover are covered — there is no minimum threshold for the Companies Act statutory audit
Section 8 (not-for-profit) companies registered under the Companies Act
Foreign companies having a place of business in India
Government companies and public sector undertakings

Why Choose Us for Your Companies Act Statutory Audit?

Our audit team brings deep expertise in Companies Act compliance, Indian accounting standards, and CARO reporting. We work closely with your finance team to ensure a thorough, efficient audit that meets all legal requirements while providing practical insights to improve financial controls and reporting quality.

If you are looking for "statutory auditors under Companies Act in India" or "company audit services for private limited companies," we provide end-to-end audit support from planning and fieldwork to final report issuance and certification.

Frequently Asked Questions

Is statutory audit mandatory for all companies under the Companies Act?

Yes. Every company registered under the Companies Act, 2013 must have its annual financial statements audited by a Chartered Accountant, regardless of its size, turnover, or share capital. There is no exemption from statutory audit for companies — unlike some other audits that have threshold-based applicability. The auditor must be appointed within 30 days of incorporation for the first audit.

What is CARO and does it apply to all companies?

CARO (Companies Auditor's Report Order) is an additional reporting requirement under which auditors must comment on specific matters — such as fixed assets, loans, statutory dues, fraud, and internal controls. CARO 2020 applies to most companies but exempts banking companies, insurance companies, Section 8 companies, OPCs, small companies, and private limited companies meeting certain criteria (paid-up capital and reserves not exceeding ₹1 crore and total loans/borrowings not exceeding ₹1 crore).

What is the difference between statutory audit and internal audit under the Companies Act?

A statutory audit is a mandatory external audit conducted by an independent Chartered Accountant to express an opinion on whether financial statements give a true and fair view. An internal audit is a management-driven review of internal controls, processes, and risk management. For certain companies (listed, unlisted public companies with paid-up capital ≥ ₹500 crore, or turnover ≥ ₹1,000 crore), internal audit is also mandated under Section 138 of the Companies Act.

Can a statutory auditor hold office for more than one term?

Under Section 139, an individual CA can hold office for a maximum of one 5-year term as statutory auditor of a company. An audit firm can hold two consecutive 5-year terms (10 years total). Listed companies and certain other specified companies must rotate their audit firms after two terms. Re-appointment is not permitted until a cooling-off period of 5 years has elapsed after the maximum tenure is completed.

What are the penalties for not getting a statutory audit done?

Non-compliance with statutory audit requirements under the Companies Act can result in penalties on the company (minimum ₹25,000 and maximum ₹5,00,000) and on every officer in default (minimum ₹10,000 and maximum ₹1,00,000). Additionally, unaudited financial statements cannot be validly filed with MCA, resulting in late filing fees and potential prosecution of directors under Sections 147 and 134 of the Companies Act.

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F.A.Q.

What is GSTR-9 and why is it required?

GSTR-9 is an annual GST return that summarizes all transactions reported during the financial year. It is required to ensure proper reconciliation and compliance with GST laws.

Who is required to file GSTR-9?

All regular GST-registered taxpayers are required to file GSTR-9, except composition dealers, casual taxable persons, and non-resident taxpayers.

What is the due date for filing GSTR-9?

The due date is generally 31st December following the end of the relevant financial year, unless extended by the government.

What details are included in GSTR-9?

It includes details of outward supplies, inward supplies, input tax credit claimed, taxes paid, and adjustments made during the year.

Is GSTR-9 mandatory for all taxpayers?

GSTR-9 is mandatory for most regular taxpayers, but certain small taxpayers may get exemptions based on turnover thresholds notified by the government.

What happens if GSTR-9 is not filed on time?

Late filing may result in penalties and late fees, along with potential compliance issues or notices from GST authorities.